What Determines Mortgage Interest Rates?

Part of what determines mortgage interest rates are worldwide economic events. What will also determine the interest rate you pay is your credit score. That you have control over.

The biggest mover of mortgage interest rates is U.S. Treasury bonds. As bond prices go up, yields go down.

Report: When the European economy was threatened by instability in Greece and other countries, investors worldwide turned to American bonds as safe investments; that helped lower U.S. interest rates.
Mark Greenberg of Wealth & Tax Planners in Walnut Creek, Calif., says, “Long term rates are set by the ‘market’ (traders, banks, etc., i.e. the participants’ collective wisdom about where rates should be). Mortgage rates, he explains, tend to follow the rates on 1, 5 and 10-year Treasury notes.
“As demand pushes bond prices up, they cost more, so they yield less (investors pay more for the same dividend amount). The converse is also true.”

Read more: http://community.nasdaq.com/News/2011-08/what-moves-refinance-mortgage-rates.aspx?storyid=91011#ixzz1VKghNACR

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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